Obsolescence: Cracking The Samsung Trap

At first, I thought it was my imagination. Around the time the Samsung Galaxy S4 was released I noticed that my sad old Galaxy SII was becoming a lot more sluggish.

The battery was starting to run down much faster, too. But the same thing seemed to be happening to a lot of people who, like me, love their Samsung products.

Planned Obsolescence?

When I called a few of my tech pundit friends, they said Samsung’s recent Android updates were being pushed out to existing users and making older models unbearably slow.

Smartphone batteries, which have a finite number of charges in them to begin with, were drained by the complexity of recent Android versions and apps. So I could pay to replace the battery, or perhaps spend a few bucks less and get a new Galaxy S4 on sale.

It seemed to me that Samsung was sending me a not-so-subtle message to upgrade. Of course, there are more benign explanations. The new software and recent app updates offer fancy new features that existing users want. Perhaps, but this isn’t the first time that tech analysts and random crazies on the Internet have noted that breakdowns in older Samsuing products can often coincide with when upgrades come onto the market.

Many have taken this as evidence of “planned obsolescence,” a term that dates to the Great Depression, when a real estate broker suggested that the government should stimulate the economy by placing artificial expiration dates on consumer products so people would buy more.

To conspiracy-theory-hungry observers (and some of the rest of us), it might make sense that Samsung would employ this business strategy. The tech giant, after all, has reached near-saturation levels in the U.S. smartphone market. If Samsung phones worked forever, people who already own the devices­ won’t buy new ones.

Furthermore, selling products with finite life spans can be good for consumers, depending on their tastes and how informed they are. The fashion industry, whose entire mission is to essentially render products obsolete long before they cease to be functional, does this regularly. I buy clothes from H&M and other low-cost, trend-driven stores knowing full well that the pieces might fall apart after a year’s worth of washes.

And if the clothes won’t be fashionable next year anyway, who cares? Improving the durability — and thereby cost — of the clothes would probably just drive away price-sensitive shoppers like me. Samsung has similar considerations. Would the additional longevity of the battery be valuable enough to its core consumers to justify the inevitable higher price?

Economists have theories about market conditions that encourage planned obsolescence. A company has strong incentives to degrade product durability when it has a lot of market power and when consumers don’t have good substitute products to choose from. (That’s what happened with the international light-bulb cartel of the early 20th century, which penalized its members for manufacturing bulbs that lasted more than 1,000 hours.) When Samsung launched the Galaxy smartphone line the products were so innovative that it could have deliberately degraded durability without fear.

In the last couple years, Samsung has faced stiffer competition from Apple, Google, HTC and Microsoft, among others, which should deincentivize planned obsolescence. “Buyers are smart, and if they start figuring out that one of the costs of buying Samsung’s products is that they’re constantly nickel-and-diming you, they’ll switch,” said Austan Goolsbee, an economics professor at the University of Chicago’s Booth School of Business.

Well, maybe. A company could still be encouraged to engage in planned obsolescence if consumers perceive large “switching costs” associated with going to a new brand. There are plenty of economics textbooks to choose from, for instance, and yet publishers still artificially make their old editions unusable by changing pagination or scrambling homework questions because they know teachers don’t want to deal with learning a whole new book.

Similarly, users have probably purchased complementary products, like apps, that won’t transfer to other phones. They also probably have a network of Galaxy-using friends with whom they can chat free using various Google apps (instead of paying for text messages). These switching costs increase Samsung’s incentives to force its existing customers to upgrade by making older models gradually become more dysfunctional.

There is, however, a simple way to effectively render an old product obsolete without fleecing your existing customers. Instead of degrading the old model, companies can offer innovations in the new model that make upgrading irresistible. Samsung succeeded at doing this for a while, offering new Galaxy models that included major improvements. In the past, consumers were so excited about the cool new features, like the larger screen, that they may not have minded (or even noticed) if their old phones started to deteriorate; they planned on upgrading anyway. This time around, that’s less true. New models offer fewer quantum improvements. Consumers are more likely to want their old phones to continue working at peak condition in perpetuity, and to feel cheated when they don’t.

When major innovations remain out of reach, and degrading durability threatens to tick off loyal customers, companies like Samsung can still take a cue from the fashion industry. If you can brainwash consumers into developing new tastes that make the old stuff look uncool for aesthetic rather than functional reasons, you still have a shot at harvesting more sales from your existing customer base.

But it seems Samsung may have already figured this out too.

Addendum

Sharp-eyed readers will undoubtedly recognize the above as a recent article in the New York Times by Catherine Rampell which decried Apple’s so-called ‘planned obsolescence.’ I simply removed references to Apple and replaced them with references to Samsung. The perspective works both ways and is equally objectionable.

Rampell’s idea of ‘planned obsolescence‘ and her singling out Apple to the exclusion of all other manufacturers misses the point of modern technology. Nothing improves without change. It isn’t so much that Samsung and Apple and anyone else that sells a modern product are interested in ‘planned obsolescence‘ as much as they are interested in improving their products.

No one forced Rampell to upgrade to the latest versions of iOS (which are free) or iOS apps, so grumbling publicly about performance on an iPhone that started life with iOS 4, four versions ago, is an obvious demonstration of crocodile tears, which explains why she was so roundly criticized by the tech media and readers.

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About Kate MacKenzie

I'm from Brooklyn, New York, used a Mac for more than 25 years, and have followed Apple since the last century. Read more of my articles here. My personal site, PixoBebo, is all about Apple. Follow me on Twitter.

Kate you nailed it. To bad most so called “tech” bloggers seem to miss this fact when it comes to Samsung. Mark my words this will get worse with Samsung even in it’s TV division. Just look around on the net and you will find loads of complaints about this in Samsung TVs.

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